Federalization erodes affordability of homes

Construction cost in the Northern Marianas will increase by 30 percent if the federal laws on labor and immigration will be applied to the island, making it impossible for local people to build their own homes, according to the CNMI Contractors Association.

In the event of a federal takeover, many construction workers will be able to get green cards allowing them to work anywhere in the United States. Since these skilled workers will not stay in the CNMI unless wages are comaparable to Guam, Hawaii or the United States, local contractors will be forced to offer higher wages to retain them, the association said in a position paper submitted to the U.S. panel in the recently held 902 talks.

Construction workers on Guam receive the following wages: carpenter $11.25 per hour; a cement mason $10.83 per hour; construction laborer $7.88 per hour; electrician $13.33 per hour; heavy equipment operator $12.81 per hour; plumber $11.99 per hour.

Overall business has remained stable as contractors shifted their focus to more local residential and government funded projects. A survey on the effect of Asian economic problems to the construction industry showed that the last six months of 1998 saw a 35 percent decline in sales compared to the same period in 1997.

As revenue from contruction projects increased by 30 percent, the industry expect the business to drop by 50 percent this year.

As a result of Asia’s financial crisis, almost all construction activities are government projects since no private development has been taking place for many months now forcing many contractors to bid low just to maintain their current work force.

A gradual increase of the minimum wage has always been supported by the association, but it can no longer support a wage increase due to the current economic crisis besetting the Northern Marianas.

Unreliable local workforce

Between 1,500 to 3,000 workers are currently employed in the construction and related industries. The Northern Marianas will always depend on off island construction workers because the young people here lack the necessary skills and experience as well as the motivation to seek the necessary training in the apparel and construction trades, the association said.

“Retaining local workers is hard because they do not come to work everyday and frequently come to work late,” the association added. Since 1989, the assocation has hired 78 local hourly workers with only seven of them staying longer than three years and two for more than four years,

Without including the seven workers who stayed for three years, the average length of employment of locals is 7.1. months.

“This means that if we relied solely on the local worker we would have about 150 percent turnover of our workforce every year,” the association said.

The association had a training program to teach local workers to become truck drivers which included both classroom and actual driving instruction. Each received full pay of $5.50 per hour plus benefits for the training period which lasted for one to two months depending on the individual.

A total of 17 local workers completed the course for the past eight years that the association ran the training program. Unfortunately, none of these drivers work here today. They either moved to Guam or Palau, worked for a tour company as a bus driver, transferred to government, terminated for excessive absenteeism and terminated for reckless driving.